The Special Needs Trust Fairness Act, federal legislation that will allow people with disabilities to create their own special needs trusts instead of having to rely on others, has passed the Congress. The measure was included in the 21st Century Cures Act, a $6.3 billion package of health-related initiatives that has now been sent to President Obama for his expected signature.

The Fairness Act, introduced in 2013 by Rep. Glenn Thompson (R-Pa.), will fix an especially frustrating drafting error in the Social Security Act that has prevented people with disabilities from creating special needs trusts to hold their own funds. Under current law, only a parent, grandparent, guardian or court can establish a first-party special needs trust to hold the beneficiary’s assets. This forces a competent person with disabilities to incur unnecessary expenses and waste time to set up a trust that she could otherwise create on her own with the help of an attorney. In most cases, not setting up a special needs trust is not an option, since the trust is typically needed to protect a person with disabilities’ access to government benefits.

The Special Needs Trust Fairness Act inserts language into the Social Security Act to give individuals with special needs the same right to create a trust as a parent, grandparent, guardian, or court. If competent to do so, they can now create a trust on their own behalf using their own assets. The two-sentence bill makes no other changes to the Social Security Administration’s treatment of trusts and it does not alter the requirement that first-party trusts contain payback provisions allowing state Medicaid offices to recoup costs from a trust after the beneficiary’s death. The Fairness Act will apply to trusts established on or after the date that the Cures Act is enacted.

A special needs trust should still be set up only with the help of a qualified attorney. To learn how a special needs trust might benefit you or a loved one, contact your special needs planner.